Internal communications and processes suggest that the Australian arm of Toys R Us may be in bigger financial strife than it has publicly let on, an employee has suggested.
After the struggling retailer announced the liquidation of its almost 800-strong store network in the US, the Australian business released a statement suggesting it was business as usual.
However, in an internal email to employees, seen by My Business, Toys R Us managing director Dianne Guerreiro said the situation in the US is “extremely disappointing and sad for all of us” and has left the Australian business in limbo.
“We are considering a range of options for our business locally including a potential sale process, however, the ultimate outcome remains uncertain,” Ms Guerreiro said.
“As you can imagine, this is a very complex situation we need to work through and we will provide ongoing updates as and when we are able. In the meantime, our stores are open for business and continue to serve customers.”
She added: “There has been a lot of interest in the Toys R Us global business in the media. We expect this will continue as we work through the implications in light of this announcement.”
An Australian employee, who wished to remain anonymous, told My Business that staff have held concerns about the business and its management for some time, with suppliers reportedly cutting the volume of stock delivered to stores.
“Suppliers have been sending us less stock to sell because of USA and U.K. Not being able to pay their bills, they have little confidence in us here [in Australia],” they said.
The staffer also revealed that immediately following the announcement, Toys R Us implemented a 20 per cent-off storewide sale, but lacked any marketing to promote the sale and the discount was not automatically being applied at registers – suggesting it was a last-minute idea to combat the negative publicity.
As of 10am Friday, the retailer’s website did mention a three-day storewide sale of 20 per cent off.
It also remains unclear whether planned new stores will go ahead given the recent developments.
Toys R Us has been contacted for comments.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.